Cadherin-mediated adhesion and the Notch signaling pathway are two critical processes developed at the start of the evolution of multicellular organisms. The first process arranges numerous cells into highly organized tissues. The second determines the differentiation program of individual cells. While some circumstantial evidence suggests that the two processes intersect, the levels and mechanisms of their interdependency are largely unknown. Our preliminary experiments identified two potentially crucial links between cadherin- mediated adhesion and Notch signaling. One of these links is a complex containing E-cadherin and gamma- secretase, the enzyme that generates a Notch-derived signal. The proteins are interconnected via p120- catenin, a critical regulator of cadherin-based adhesion. In a second complex, E-cadherin interacts with Notch ligands, either Dll1 or Jag2. This proposal addresses four questions: (i) What are the detailed structures of both complexes and how are they assembled? (ii) What is the role of cadherin in their cell surface dynamics, and in their endocytosis in particular? (iii) What are their roles in Notch signaling? (iv) What are their roles in keratinocyte differentiation? We propose that cadherin facilitates Notch signal transduction by co-clustering Notch signaling components within cell-cell junctions and/or within the endocytic structures. Furthermore, cadherin-driven endocytosis of these clusters may generate the shift in Notch conformation, thereby initiating a Notch signaling cascade. This proposal will shed light on mechanisms coordinating morphogenetic, proliferation and differentiation programs of keratinocytes during normal homeostasis and inflammatory skin diseases.